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MRC Global's Growth Prospects Bright Despite Macro Issues


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On Oct 14, 2016 we issued an updated research report on MRC Global Inc. (MRC - Analyst Report) .

Scopes of Improvement

MRC Global has been steadily bolstering its upstream, midstream and downstream sales through product portfolio solidification and superior customer relationship. Moreover, the company is signing new contracts for augmenting its top and bottom lines in the quarters ahead. For instance, the two latest Enterprise Distributor Program (EDP) agreements, signed with Cameron International and Schlumberger, would further boost the company’s ongoing multi-year strategy. Through this program, MRC Global aims to generate more than 40% of its revenues from automation, valves, instrumentation and measurement products. Higher sales of these products and services would be backed by new acquisitions, investments and contracts. Also, MRC Global continues to make diligent efforts to improve its financial performance benefiting from effective cost-reduction and capital-deployment strategies.

However, revenues and margins of this Zacks Rank #3 (Hold) stock are being hurt by several headwinds. Fragile macroeconomic environment, due to factors like soft energy resource prices, Brexit vote and slow domestic demand of emerging markets, has been weighing over the demand for manufacturing and industrial companies like MRC Global. Moreover, other issues, such as appreciation of U.S. dollar, extensive industry rivalry and weakening steel prices also remain major causes of worry for the company.

Stocks to Consider

Some better-ranked stocks in the industry that warrant a look are listed below:

Deere & Company (DE - Analyst Report) currently sports a Zacks Rank #1 (Strong Buy). The company has a positive average earnings surprise of 32.16% over the last four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.

ACCO Brands Corporation (ACCO - Snapshot Report) and AGCO Corporation (AGCO - Analyst Report) carry a Zacks Rank #2 (Buy).

While ACCO Brands Corporation generated a positive average earnings surprise of 23.96% for the trailing four quarters, AGCO Corporation (AGCO - Analyst Report) has a positive average earnings surprise of 62.51% in the trailing four quarters.

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